- EUR/USD trims some of its Monday losses and clings above parity but just above July’s 10 low.
- Recession fears persist as the US 2s-10s yield curve stays inverted.
- Fed’s Barkin is undecided about going 50 or 75 bps in July’s Fed monetary policy meeting.
- EU and German ZEW missed expectations, spurring a EUR/USD fall close to parity.
The EUR/USD bounces off fresh 20-year lows around the parity area, trimming some of Monday’s losses, as market sentiment wobbles, reflected by US equities fluctuating between gainers and losers, ahead of the US June Consumer Price Index (CPI) to be released on Wednesday.
At the time of writing, the EUR/USD is trading at 1.0052 after tripping towards 1.0000 during the European session on worse-than-expected German data. The pair then jumped towards the daily highs around 1.0073, 10 pips shy of the 50-hour EMA around 1.0082, which put a lid on upward EUR/USD prices.
EUR/USD rises despite investors’ fragile mood
The market mood is mixed, as portrayed by US equities fluctuating as recession fears persist. The US 2s-10s yield curve stays inverted for the second time in the week, reaching -0.107%, a level last seen in 2007. Meanwhile, the US Dollar Index, a gauge of the greenback’s value, takes a breather, down 0.20% at 107.986, a tailwind for the EUR/USD, which dropped close to the parity on weaker than expected EU news.
In the meantime, Fed speakers did little to nothing during the New York session to boost the greenback. Richmond’s Fed President Thomas Barkin said that he was reserving judgment on a 50 or 75 bps rate hike in the July meeting and reiterated that he would like real rates positive across the curve. Furthermore added that a negative Q2 GDP would take it “seriously” while adding that he expects another elevated inflation report.
The White House (WH) expects US CPI to remain elevated but downplayed recession worries in a memo reported by Reuters. The White House added that the “Impact of energy and food prices on annual headline CPI in June will likely exceed 40%, based on market expectations.”
- Fed’s Barkin: A path to cool inflation but a recession ‘is possible
- White House: Impact of energy and food prices on annual CPI in June to likely exceed 40%
During the European session, the EU and German ZEW Surveys of Economic Sentiment missed expectations, sparked by the bloc’s energy crisis, supply chain disruptions, and the ECB’s intentions to hike interest rates. according to ZEW President Achim Wambach, “Experts assess the current economic situation significantly more negatively than in the previous month and have further lowered their already unfavorable forecast for the next six months.”
What to watch
The Eurozone economic docket will feature the Industrial Production for the Eurozone and Germany’s Inflation Rate. Across the pond, the US economic calendar will report June’s inflation rate, expected at 8.8% YoY, while core CPI is estimated at 5.8% YoY. Later, EUR/USD traders will get some clues in the Fed’s Beige Book, which the Fed uses in its monetary policy meetings.
EUR/USD Key Technical Levels
|Today last price||1.0044|
|Today Daily Change||0.0003|
|Today Daily Change %||0.03|
|Today daily open||1.0041|
|Previous Daily High||1.0186|
|Previous Daily Low||1.0034|
|Previous Weekly High||1.0463|
|Previous Weekly Low||1.0072|
|Previous Monthly High||1.0774|
|Previous Monthly Low||1.0359|
|Daily Fibonacci 38.2%||1.0092|
|Daily Fibonacci 61.8%||1.0128|
|Daily Pivot Point S1||0.9988|
|Daily Pivot Point S2||0.9935|
|Daily Pivot Point S3||0.9836|
|Daily Pivot Point R1||1.014|
|Daily Pivot Point R2||1.0238|
|Daily Pivot Point R3||1.0291|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Follow us on Telegram
Stay updated of all the news
EUR/USD remains on the back foot below 1.0800
EUR/USD remains on the defensive below 1.0800, as it consolidates weekly gains heading into Friday’s European session. The pair takes cues from the market’s sluggish momentum amid a light calendar and repositioning ahead of next week’s top-tier EU/ US events.
GBP/USD keeps range around 1.2550 amid quiet markets
GBP/USD is keeping its range play intact at around 1.2550 in the European morning this Friday. The US Dollar is licking its wounds following the US jobs data-led steep sell-off. Markets stay cautious, anticipating the end-of-the-week flows and position adjustments.
Gold lacks firm intraday direction, flat-lines around $1.965 area
Gold price struggles to capitalize on the previous day's solid rebound from the 100-day Simple Moving Average (SMA) support near the $1,940-$1,939 area and oscillates in a narrow trading band on Friday.
Binance.US to suspend USD deposits, citing aggressive and intimidating tactics by the SEC
BinanceUS, the American arm of Binance.com, has indicated plans to suspend USD deposits, noting that its banking partners would do the same for withdrawal beginning June 13.
US jobless claims shake markets, ECB and Fed meetings await
US weekly jobless claims, of all things, was responsible for yesterday’s main market move. Applications rose from 233k to 261k, more than the 235k expected. It triggered a US bond rally which dragged European peers higher as well.